TV Gets With the Programmatic Program [Breaking News]

By borrowing from techniques honed in the white-hot world of digital video, TV advertising is gravitating toward programmatic models that bring buyers and sellers together in an increasingly automated fashion.

While ad reps will be relieved to know that programmatic methods won’t overtake the traditional way TV ads are bought and sold anytime soon, progress is being made as agencies, vendors and programmers continue to experiment with and deploy new Web-style approaches.

What follows are examples of how programmatic techniques are starting to be stretched across the TV advertising landscape.

COX JUMPS IN

Cox Media, the ad-sales arm of Cox Communications, is well beyond the toe-dipping phase. It has taken the plunge.

“All of our inventory is available programmatically now,” Mike Zeigler, vice president of business development and operations at Cox Media, said. “There is no carve. We don’t consider it remnant business. We get rates out of programmatic that oftentimes rival our other sales channels.”

Cox Media’s programmaticfacing activities go back aways. It initially began to use impression- based ad sales more than two years ago, through a deal with Google, which helped the Cox Communications unit deliver a certain number of impressions over a specific time period regardless of where the ads aired in the MSO’s footprint. Google later withdrew from the TV-ad market, leaving a void that Cox Media has since filled with the help of several partners, including Clypd, AT&T AdWorks and AudienceXpress (the programmatic division of Visible World).

“Programmatic is an emerging sales channel for us,” Ziegler said. “It’s very important and it’s our fastest-growing sales channel.”

It’s also a tool Cox Media can use to secure a competitive position amid a growing group of rivals that are all trying to attract ad dollars. Programmatic models “allow us to network ad impressions to compete directly with digital,” Ziegler said.

Programmatic has grown beyond an efficient way to sell unused ad avails into a popular option for premium ad buyers, he said. But programmatic hasn’t replaced human beings at Cox Media, which relies heavily on a traditional sales force.

Do those reps feel threatened? Ziegler said he hasn’t seen that yet, but acknowledged that it’s natural for salespeople to keep an eye on shifting trends and to ask questions about how emerging technologies might affect their existing client relationships.

“Ultimately, the value of transacting directly with one of our reps is the advice and the high-touch service that they provide,” Ziegler said, noting that programmatic is a means for transacting high-frequency business, but doesn’t hold the same value proposition as the feet on the street.

“But it’s inevitable that automation will occur,” he said, adding that ad buyers and agencies increasingly want to go directly to inventory owners.

ESPN’S PREMIUM PLAY

While some of the early forays into programmatic TV tie in automated ways to pitch remnant inventory, ESPN is taking a different tack with its initial efforts. It’s offering it as a premium opportunity.

ESPN’s first programmatic TV execution, launched in December, carves out a special advertising unit within flagship news show SportsCenter that does not affect its standard units. In those instances, the anchor tells viewers that the show will resume soon as the camera zooms into one of the multitude of video screens on the SportsCenter set, which then presents the 30-second spot within the show itself.

TurboTax is the first advertiser to jump on the opportunity, though ESPN is also holding talks with other advertisers about it.

“We’re excited about the idea that we’ve created a very unique execution, and something that feels very premium,” Eric Johnson, ESPN’s executive vice president of global multimedia sales, said.

ESPN, in tandem with partners such as Clypd, is using a programmatic process to sell those ads. While there’s still some manual work involved, it’s conceptually a programmatic buy that uses auction-type selling.

ESPN views this as a first step, believing that the process will become smoother and more streamlined in the months ahead. In the meantime, the network is in education mode.

Johnson said the idea has been very well-received so far, though there’s a learning process underway because the market still has differing views as to what “programmatic” means. As that gets sorted out, ESPN’s approach presents few risks, because it’s offered as an isolated 30-second spot outside of traditional ad pods.

Looking ahead, ESPN doesn’t have plans to expand its programmatic ad inventory anytime soon, but the network will look to apply more data and analytics that can result in more targeted advertising opportunities.

SUPER BOWL PAYDIRT

As a clear indicator that the programmatic game is ready to play on one of TV’s biggest stages, the technology played a role on Super Bowl Sunday.

Billed as the first Super Bowl broadcast- TV ads sold through programmatic technology, Mondelez International bought space to run two 15-second ads for the Oreo and Ritz brands during the big game Feb. 1 on NBC affiliate WICU-TV in Erie, Pa. The ads, which ran shoulder-to-shoulder, were purchased via TubeMoguls’s programmatic platform, and through WideOrbit, its partner for the local broadcast inventory.

Seizing on the opportunity of the game, WideOrbit opened up a window into the inventory and established a bidding process.

“This was not a faux spot,” Eric Mathewson, founder and CEO of WideOrbit, said. “It went through the programmatic channel we have architected for the future.” WideOrbit has been finalizing a programmatic advertising system for local broadcasters that will expand to radio and cable networks later this year, he noted.

The more-automated programmatic process did give Mondelēz International access to reports and affidavits on the spots the day after the game, rather requiring the company to wait for third-party monitoring systems to deliver that data. Such deliveries tend to take 30 to 45 days, Mathewson said.

As designed, that sort of quick turnaround will benefit buyers and could ultimately make TV advertising more attractive. “We think that TV is undersold … and underappreciated by the buyers,” Mathewson said. “It’s more effective than people give it credit for.”

While this was a first, Mathewson predicted many more ads will be sold programmatically for Super Bowl 50. “My guess is that there will literally be hundreds of them next year,” he said.

In addition to bringing more automation to the process, programmatic elements also extend to using data in a way that can help advertisers better target their products to potential buyers.

MIXING ART & SCIENCE

Adap.tv, the advanced-ad unit of AOL, has overseen an array of programmatic-facing campaigns with that goal in mind and has seen some success in the early going.

Among recent work, Adap.tv hooked up with Art.com, an online retailer of posters, prints and framed art that had plenty of experience with digital advertising, but was looking to expand into TV in order to reach an audience it hadn’t touched online.

“The challenge was to reach a differentiated audience and to bring new customers in,” Dan Ackerman, Adap.tv’s senior vice president of programmatic TV, said.

To do that, Art.com tapped into Adap.tv’s Audience Path platform to create a programmatic TV plan that reached across the media landscape, ultimately resulting in a sixweek campaign that touched three national broadcast stations and at least two dozen cable networks.

Adap.tv, which bought inventory on behalf of Art.com, created the campaign by analyzing about 200,000 customers, then profiling them using a proprietary scoring mechanism that stripped out personal identifying information, and generated two customer segments — young tech-savvy women, such as newlyweds and new home-buyers, and an older group of women determined likely to be redecorating their homes.

Art.com drove 77% more orders via the campaign, compared to more traditional demographic buys that targeted women 25-54, according to Adapt.tv.

Though Adap.tv is starting with a small base, its programmatic-TV efforts are growing at a high rate. Ackerman estimated the company will end the first quarter with more campaigns and dollars tied to its programmatic efforts than in most of 2014 combined.